Disney isn’t launching its new string service until later this year, but investors are already learning the economic challenges of the business.

The media firm said in a filing on Friday that its investment in Hulu was the primary contributor to a $580 million loss in equity investments in the budgetary year that ended Sept. 30. Additionally, Disney lost $469 million in its direct-to consumer-segment, at bottom from BAMtech, the streaming technology that powers ESPN+ and other over-the-top services.

That’s more than $1 billion associated with slide, the area where CEO Bob Iger is focusing his attention. Disney will debut its Disney+ offering later in 2019 to change ones mind compete with Netflix and Amazon.

Losses in streaming will likely surge in the early days of the venture, as significance and technology costs spike, said Rich Greenfield, an analyst at BTIG. Disney has also yet to assume control of another 30 percent of Hulu, fragment of its $71.3 billion deal for the majority of 21st Century Fox. If Disney were to acquire Comcast’s 30 percent stake in Hulu, that inclination further increase operating losses.

“Streaming requires a strong stomach for losses, especially as you are playing catch-up,” Greenfield contemplated in an interview.

Disney is hoping that, over time, millions of paying customers will subscribe to Disney+ for its new primary content and library of Disney movies and TV shows. Pricing hasn’t been disclosed. Netflix, which announced its four times a year earnings on Thursday, has 139 million global subscribers and just informed them that it’s raising prices by 13 percent to 18 percent.

Disney published its acquisition of a majority stake in BAMtech (formerly owned by Major League Baseball) in 2017, so its report for 2018 is the victory to show consolidated earnings results for the company.

Streaming is a hard place to make money, even for Netflix. While the Theatre troupe consistently posts positive operating income, it has burned cash for years, raising new debt and spending the revenue it originates on new content. Netflix could spend well over $10 billion for movies and shows in 2019, according to some analyst believes.

Disney’s media networks, which include ESPN, ABC, Disney Channel and others, brought in $7.3 billion in functioning income for 2018. Investors will be paying close attention to that number as streaming becomes a bigger meet and consumers are given another lower-cost entertainment option in the move away from traditional cable.

“I think Brick up Street is at least accepting of the fact that we’re doing this, that it’s the most important thing we’re doing,” Iger told Barron’s in an appraisal published earlier this month. “And while I won’t say they’re cheering us on, they’re definitely giving us the room to prove that we can do it.”

Disclosure: Comcast is the mother company of NBCUniversal and CNBC.

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